Over the coming months, the European Parliament’s Committee on International Trade (INTA) will be examining a number of controversial issues relating to economic security, as well as the conclusion of new trade agreements, some of which are highly controversial. In an interview with Agence Europe, the Chair of the INTA Committee, Bernd Lange (S&D, German), sets out his vision for the major issues to be tackled in the new mandate. (Interview by Léa Marchal)
Agence Europe: What is the priority issue for the INTA Committee over the coming months?
Bernd Lange: I guess the revision of the regulation on foreign direct investments (FDI) is one of the top five. But also the revision of the regulation on the Generalised Scheme of Preferences (GSP) so that we have really a proper vision regarding partnership with third countries.
There will be harsh debates on economic security, particularly on the potential control of outbound investments (see EUROPE 13335/1). What do you think about such a possibility?
I’m quite sceptical and I’m not keen to have a legislation on that. I think it’s a question of principle and we should really reflect on what our political and economic interests are. There’s also the question of security, as in the United States, but I think the situation is different (here) than in the United States. They have mostly investments come from investment funds and banks, where it’s not totally clear under what conditions investment transactions take place between countries. In the European Union, most investments are done by companies, and they have quite a good knowledge of what they are doing, where possible risks are.
Secondly, we really want to promote investment, specifically in Africa. We should not introduce instruments which perhaps reduce the mood to invest in foreign countries.
As for foreign direct investments in the European economy, the draft revision of the regulation is in the hands of the European Parliament and the EU Council. Do you expect difficulties in the co-decision process?
It’s always a question of how we can come to a European solution on topics of national sovereignty. But I hope that we can, because specific investments in critical infrastructures might have consequences for other European countries, and therefore I think this more European approach and also having a better information exchange is really necessary.
Another issue is the GSP regulation, which grants trade preferences to the least developed countries. Negotiations between the European Parliament and the EU Council came to a halt last year, mainly because the Member States wanted to link trade preferences to the obligation to readmit migrants. How do you think the situation could be resolved?
What is important, I think, is that the migration package is now ready and will come into force in 2 years. In between, we will also have some negotiations with third countries about readmission. And I hope that this will lead to a more rational approach to the GSP.
Still, I’m not willing to accept that we hijack 30 countries because we have problems with three countries that are not taking back their citizens. But I’m quite relaxed. There is no time pressure because the current system has been extended until 2027.
So does this mean that, in terms of the timetable, the resumption of negotiations is not foreseen during the Hungarian Presidency of the Council of the EU?
No.
As far as free trade agreements (FTAs) are concerned, the situation is more or less at a standstill. How can we make progress on this front?
I wouldn’t be so negative. We have a really good agreement with Chile and New Zealand. The one with Japan is working well, as is the one with Vietnam, which has seen a lot of investment in 3 years. And we are in really good negotiations with Indonesia, which is the fifth biggest country in the world. We restart talks with Australia and we have Mercosur. This week, EU negotiators are in Brasilia and the additional protocol is more or less also ready.
But no trade agreement has yet been ratified by the EU. How do you think this could change?
The problem is on our side. Negotiations with Australia failed because of the agricultural sector, and it’s the same for Mercosur. So this is a kind of homework for us inside the European Union, to discuss first what is the most important part of such a trade agreement. Is it the economy as a whole? Is it the geopolitical situation? How can we really stabilise the trading system on which we depend so much?
39 million jobs are based on trade with many countries worldwide, and we are seeing fragmentation and protectionism all over the world. That’s why a network of reliable partners is so important for our economy and geopolitically. So we have to find a balance between our agricultural interests and all the other aspects of such an agreement.
It can’t be that we are negotiating agreements, and at the last moment, because of some domestic developments, it is under risk. So that’s one homework and I think linked to that, the homework is to reflect also on our agricultural policy.
A lot of criticism is also linked to the lack of enforcement tools for the trade and sustainable development chapters in free trade agreements.
First of all, I reject the position that trade agreements should not have a strong sustainability dimension. It is only fair that citizens should also benefit from trade. And we are talking about international conventions, so it’s not us imposing our European standards, they are internationally accepted standards.
In my experience, we have, with our trade partners, the same goals and it’s really our duty to discuss this with them on how to implement these in a proper way. Doing nothing in terms of cooperation and, at the end of the day, sanctions are not an appropriate method in the context of a partnership.
Look around you. What type of sanctions have really had the effect you wanted? We reimposed tariffs on Cambodia (which was benefiting from the GSP preferences but failed to comply with human rights obligations, editor’s note). Did this changed the situation in Cambodia? No.
Of course, this last resort is sometimes necessary, but a clear priority is to cooperate in the proper implementation of agreed international standards. Therefore I’m quite relaxed that we have no sanction system with Mercosur. These are really self-confident countries and, (for example), the Brazilian President Lula has a proper plan for stopping illegal logging and for strengthening labour rights. So why should we now be saying “Our way is a better way?”